Here's Why Labubus May Not Last

A small toy monster with a toothy grin, known as a Labubu doll, has taken the world by storm, adorning the bags of millions of consumers — including popstar Rihanna and tennis champion Naomi Osaka. Some editions fetch thousands of dollars on resale, and Pop Mart, the Chinese maker of the toys, saw revenue jump over 200% in the first half of the year. But our Asia Global Business Managing Editor Rachel Chang joins Caroline Hepker to discuss how the modern toy trend started, and if it can continue.

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Episode Transcript

Speaker 1 (00:00):
Bloomberg Audio Studios, Podcasts, radio news. I'm Caroline Hepker, and
this is Here's Why, where we take one news story
and explain it in just a few minutes with our
experts here at Bloomberg.

Speaker 2 (00:19):
Things go viral on social media and they don't always
make sense.

Speaker 1 (00:23):
La Boo Boo, the plush toy from China's PopMart, is
a social media darling in Hong Kong.

Speaker 2 (00:29):
When you look at the investment bankers, like a lot
of the female bankers, they were wearing La Buobu key
chains along where they're working bags. We're also seeing a
lot of spending shifting towards what we call the happiness economy.
Collectibles experiences self expression. You know, adults are looking for
a little joy and they're finding it in the stuffed
animals that might cost, you know, twenty thirty dollars a pop.

Speaker 1 (00:51):
The toy that's taken the world by storm, it's La Booboo,
the mischievous looking monster doll that has fueled a global
collecting create. Some are sold in mystery blind boxes, getting
buyers hooked on hunting down rare models and completing full sets.
Some additions fetch thousands of dollars on resale, and PopMart,

(01:12):
the Chinese maker of the toy, saw revenue jump over
two hundred percent in the first half of the year,
sending parents not unlike me, around the world hunting for
this hot toy. But there's a catch. Pop Marks stock
tumbled after a downbeat forecast, and analysts say toy crazes

(01:32):
usually burn out within two to three years, not unlike
beanie babies in the US three decades ago. So here's
why La Boo Boos may not be here to stay.
Our Asian Global Business Managing editor Rachel Chang joins us
Now for more on this. Rachel, what has made this

(01:54):
sharp toothed, fuzzy little doll a global obsession? Why do
people keep buying them?

Speaker 2 (02:02):
To be honest, it's anyone's guess. I think the company
itself is a little bit mystified by it. I think
it's just some amount of nice designs, some amount of
celebrities spotting them. I think the original celebrity that really
got them big was Lisa from Black Pink. And to
be honest, it's also a huge amount of luck because

(02:22):
there's so many of these little toy dolls around and
La Bogus somehow have managed to hit on a particular
mix in the culture right now that's really responding to
these creatures.

Speaker 1 (02:35):
How much money then is flowing into La Booboos, both
from buyers and also into the maker pop mark a huge.

Speaker 2 (02:44):
Amount of money, and I think that's been quite shocking
really for the company. The original toy itself are quite affordable.
The original version is something like less than one hundred
uns or that's about fourteen US dollars each, but on
the resale map it that price has just searched to
such high amounts. You see, laboog was going for hundreds

(03:05):
of dollars at the time. There was a record set
for a life sized La Boogu that went at auction
for one hundred and fifty thousand US dollars. And you know,
there's such a vibrant secondary market for it as well.
You know, there's this thriving business of outfits for La
boo boos. You know, a really famous recent example was
Naomi Osaka, the tennis pro who I think she reached

(03:28):
the semi finals of the US Open and every match
she had a different bijeweled La Boogu in a different
tennis outfit that matched her own. And you know, these
are like a whole industry of designers and makers that
create these outfits for La Booboos, which are making a
lot of money as well. So the original company has
really ballooned into a huge consumer company, you know. And

(03:50):
it's peak their market cap was something like fifty billion
US dollars, which made them really the most valuable a
toy company really in the world. But that's a lot
of situations there, and I think the stock has definitely overbought,
that has come down a little bit, but certainly for
a company with only a couple of famous toys, it's
quite incredible.

Speaker 1 (04:11):
Even counterfeit Laboo Boos have their own name, don't they.
Fakes are called Lafufus. What do analysts then say about
similar toy frenzies?

Speaker 2 (04:21):
So the Laboogoo frenzy has definitely spread to other similar toys.
So Potmat itself is launching a lot of other toy
rangers and hoping that some of that demand carries through
to their other toys. We also did quite a nice
story around a Japanese monkey like creature similar to La

(04:41):
Boogles called one Chi Cheese. So Lisa from Black Pink
has been spotted wearing One che Cheese as well. It
has been spotted shopping in a mon Chichi shop, and
that company, the Japanese company behind One Che Cheese, which
is like a twenty year old toy, has also seen
a huge growth and demand and much more visibility thanks
to the Labugu. So it does seem as if the

(05:03):
laboos are ushering a wave of demand for you know,
particular animal looking toys that can essentially be attached the
accessories of bags. There's almost really a conspicuous consumption sort
of item.

Speaker 1 (05:17):
So is Pop Marked's success sustainable. I've heard the idea
maybe of building out its intellectual property going further.

Speaker 2 (05:27):
I think that is really the question that is on
everyone's mind right now. And the company, from talking to them,
are well aware of this issue because you know, they're
they're coming onto the scene just really with a toy, right.
It's not there's no ip attached to it. It's not
like it's not like Disney, where you know there are movies,
their narratives, their stories and theme parks. This is just

(05:49):
a toy. Nobody knows the backstory, nobody knows the characters.
I think there has been some concern recently that, you know,
with the release of the new mini La Boo Boo
and a restocking of supply available, the prices in the
resale market have dropped quite a bit as well. It
does feel as if the peak of the frenzy has passed,
and we do see those sorts of surges and declients

(06:11):
quite often with some of these consumer goods, right for example,
limited edition sneakers, you know, those used to be so expensive.
Now the prices come back down. So for pop Back
now it really is about how do they extend this
moment into a real business story, And they have talked
about taking it slow and developing IP and working on

(06:32):
theme packs, and they do have a lot of ideas,
but there is a big question around whether or not
this moment will continue.

Speaker 1 (06:39):
Are their clues suggesting the hype may already be fading
or cooling off?

Speaker 2 (06:45):
There definitely are so with the launch of the Mini
La Boo Boos, which I think was last month, after
that initial search of demand around it and resale prices
for the Boo Boos have come down at least about
twenty to thirty percent. And it does seem like in
the culture, you know, as I mentioned Lisa from Blackpain,
different celebrities. They're now being spotted with other sorts of toys, right,

(07:06):
not just so, it does feel as if the peak
is passing, and you know, a lot of people are
drawing comparisons, for example, the Benie Baby toys, which were
crazy in the US about three decades ago in the
nineteen nineties. At that time, we saw resale prices, parents
really going crazy trying to get these toys for their kids.
We saw resale prices really search of these Benie Baby

(07:28):
toys before pretty much fading within about four years. We're
not really sure what the future level WOO is, but
definitely there are signs that that's fading now. The question
is can they become one of those toys that essentially
can keep going for example Barbie dolls right or even
IP connected toys like Star Wars figurines where the demand

(07:48):
can just keep going.

Speaker 1 (07:50):
Rachel Chang, our Asia Global Business Managing Editor. Thank you
for more explanations like this from our team of three
thousand journalists and analysts around the world. World go to
Bloomberg dot com slash explainers. I'm Caroline Hepgar. This is
here's why we'll be back next week with more thanks
for listening.